Convenience Checks: A Convenient Credit Disaster

You may have noticed something called “convenience checks” in your credit card bills or other mail from your credit card company. When you get these, be very careful about what you decide to do with them.

These checks, often mailed in small sets and to be used for balance transfers or certain purchases, do not work like regular credit card transactions. In fact, they can end up costing you much more than you intended to spend. These can be hidden sources of credit card debt, and a thorn in the side of anyone trying to cut their costs.

The Dangers of Convenience

  • High, instant interest: You’ll have to read the fine print to determine exactly what the interest rate is on a convenience check you receive, but don’t assume it’s the same as your credit card. As of this writing, they’re usually higher than 20 percent. As if that weren’t bad enough, interest begins accruing immediately on purchases made with these checks. Normal credit card purchases don’t accumulate interest until the end of the billing cycle.
  • Transaction fees: Simply using these checks will cost you money. We all know that convenience comes at a price, and in the case of these checks it’s generally around five percent of the purchase made, which can be a shockingly high number if you’re paying a large bill with one.
  • Decreased credit availability: Receiving one of these checks does not mean you’re cleared to use it – the amount you spend will count toward your credit limit. Because credit card companies have been slashing interest rates lately for even strong customers, you should probably check with yours if you aren’t sure about your limit. Oh, and available credit is one of the factors that affects your credit score, so using too much could lower yours.
  • Limited protection: While the Fair Credit Billing Act protects you from certain purchasing mishaps that occur when you use your credit card, it does not protect purchases made with these checks.
  • Identity theft risk: If you opt not to use these checks, make sure you shred or otherwise destroy the checks to eliminate the chance of a thief using one and costing you serious money – and even stealing your identity!

Remember: These checks do not act as a cash gift or “extra money.” They are high-interest loans that could throw you for a financial loop.


PAID ATTORNEY ADVERTISEMENT: This Web site is a group advertisement. It is not a lawyer referral service or prepaid legal services plan. Chapter7.com is not a law firm. The sole basis for the inclusion of the participating lawyers or law firms is the payment of a fee for exclusive geographical advertising rights. Chapter7.com does not endorse or recommend any lawyer or law firm who participates in the network. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. The information contained herein is not legal advice. Any information you submit to Chapter7.com may not be protected by attorney-client privilege. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 510, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here.

If you live in Alabama, Florida, Missouri, New York or Wyoming, please click here for additional information.

By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.